Posts Tagged ‘direct bidders’

First Time in History – Direct Bidders Buy More Treasuries than Wall Street Dealers; Reflections on Common Sense

First Time in History – Direct Bidders Buy More Treasuries than Wall Street Dealers; Reflections on Common Sense

Courtesy of Mish 

Here’s an interesting sign of the times from Bloomberg: Treasury Bids Rise 18% as Investors Surpass Dealers

For the first time since the government started collecting the data, central banks, mutual funds and U.S. banks are buying more government securities at Treasury auctions than Wall Street’s bond dealers.

Foreign and domestic investors bidding directly at note and bond auctions bought 57 percent of the $1.26 trillion in Treasuries sold by the government this year, up from 45 percent during the same period in 2009 and as little as 32 percent for all of 2008, according to government data compiled by Bloomberg. Bids compared with the amount of debt sold, the bid-to-cover ratio, rose 18 percent from last year’s 14-year high, according to data that Treasury started collecting in 1994.

“The data shift that we had from the first quarter to the second quarter has been fairly dramatic and came sooner than many investors would have expected,” said Eric Pellicciaro, New York-based head of global rates investments at BlackRock Inc., which manages about $1 trillion in bonds. “Treasuries are still attractive.”

Primary dealers, which are required to bid in government auctions and act as the trading partner to the New York Fed, have won the lowest proportion of Treasuries in auctions since the government began releasing the data in 2003.

Bond Bears

Even bond-market bears such as primary dealer Morgan Stanley have trimmed forecasts for U.S. yields to rise in the second half of the year, with slow growth likely to keep the Federal Reserve from increasing record low borrowing rates into 2011. The target for overnight loans between banks has been zero to 0.25 percent since December 2008.

Morgan Stanley of New York has lowered its estimate for the 10-year yield at the end of the 2010 to 3.5 percent from 5.5 percent at the start the year. The median projection of 55 forecasts in a Bloomberg survey is 3.36 percent, down from 3.80 percent in June.

Pent-Up Demand Takes Hold

Over the past few years I have received many taunts from people saying treasuries were a sure loser.

However, a few inquiring minds did ask who would buy them. My reply was there was a pent-up demand for treasuries. I said so in a rebuttal…
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Roubini: “The US Economy Is Unsustainable”

Roubini: "The US Economy Is Unsustainable"

Courtesy of Tyler Durden

Red Bull Air Race Perth - Training Day

Yesterday Nassim Taleb said that his primary concern about an upcoming "Black Swan" is a failed Treasury Auction. This is precisely what Zero Hedge has been concerned about for the past year, although we feel that this event will likely be at least marginally telegraphed, either in the form of Direct Bidders taking down close to 50% of each auction (with the Primary Dealers monetizing the balance), and an accelerated flattening of the yield curve. Last night, Roubini, who has apparently thrown away the mantle of moderation and is back to his gloomier ways, said that he worries "that with a trillion deficit this year and next year, 2012, and for as far as the eye can see, eventually, not this year, but the next year, the markets are going to wake up and say, this is unsustainable." In other words whether via the Treasury market, or some other way, at some point the balance will shift from one where the market still believes that reserve currency is enough of a backstop to prevent the collapse of the US, to a regime where incremental bailouts will be seen as negative. That moment will be true black swan, and the beginning of the end of the great US experiment.

Back to Roubini, who in his last night’s interview with Fox Business’ Neil Cavuto is about as bearish as we remember him from the doom and gloom days of early 2008.

On Greece being the tip of the iceberg:

“In my view what is happening in Greece is just the tip of an iceberg.  With private debt in many parts of the world, we socialize these private losses.  Now with large budget deficits in Europe, in Japan, in the United States.  The bond market vigilantes have woken up in Greece, in Portugal, in Spain.

At some point they’re going to wake up in the U.K., in Japan, in the United States.  We’re running a 3.5 budget deficit.  It is obviously over time not sustainable.”
 
On why there has not been any market discipline:

“The Fed has near zero rates.  There is low growth.  There is still deflation.  So for a number of reasons, interest rates are still low.  That is why there is no market discipline. This is unsustainable.  There is going to…
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Smart cities: The promises and failures of utopian technological planning

 

Smart cities: The promises and failures of utopian technological planning

For utopian cities to succeed, they should offer technological solutions to urban challenges. Shutterstock

Courtesy of Sylvie Albert, University of Winnipeg

Technology and innovation transform the ways that we interact with governments, purchase products and manage our health and lives. This turmoil affects cities, where the accelerating digitalization of our economy has opened the door for more technologies. It has also created the space to design utopian projects that profile the ways technology can be used to improve the quality of urban life.

Urban planners, technology companies and develo...



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Zero Hedge

WTFX!?

Courtesy of ZeroHedge. View original post here.

Authored by Michael Every via Rabobank,

The ripple effects of the sharp rise in oil prices continued on Tuesday.

Brent crude spiked to a six month high after the White House announced that the US will no longer offer exceptions to buy Iranian oil when current waivers expire on May 2. The US dollar appreciated broadly against its G10 peers and US stocks proved relatively resilient to higher oil prices. The S&P 500 Index rose 0.9% to 2,933.7 on the back of another set of encouraging earnings with almost 80% of US companies re...



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Insider Scoop

Earnings Scheduled For April 24, 2019

Courtesy of Benzinga.

Companies Reporting Before The Bell
  • Caterpillar Inc. (NYSE: CAT) is projected to report quarterly earnings at $2.86 per share on revenue of $13.38 billion.
  • AT&T Inc. (NYSE: T) is estimated to report quarterly earnings at $0.86 per share on revenue of $45.11 billion.
  • Anthem, Inc. (NYSE: ...


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Chart School

Trump China trade deal currency component

Courtesy of Read the Ticker.

The coming Trump trade deal could have an interesting component effecting the US dollar.

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Fundamentals are important, and so is market timing, here at readtheticker.com we believe a combination of Gann Angles, ...

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Digital Currencies

5 Cryptocurrency Tax Questions To Ask On April 15th

Courtesy of ZeroHedge. View original post here.

Authored by David Kemmerer via CoinTelegraph.com,

Depending on what country you live in, your cryptocurrency will be subject to different tax rules. The questions below address implications within the United States, but similar issues arise around the world. As always, check with a local tax professional to assess your own particular tax situation.

...



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Kimble Charting Solutions

Silver Bear Market Faces Big Price Support Test!

Courtesy of Chris Kimble.

When silver, gold, and the precious metals industry were red-hot bullish in the 2000’s, investors could do no wrong.

You could buy SILVER at just about any price and it would go higher.

In today’s chart, you can see three large green bullish ascending triangles from the 2000’s that lead to big gains. But that was the bull market before the current bear market.

The tables have turned since the 2011 price top. Silver quickly formed a bearish descending triangle and fell another 50 percent when that broke down. This sent a vicious bear mark...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Biotech

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Reminder: We are available to chat with Members, comments are found below each post.

 

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Assorted cannabis bud strains. Roxana Gonzalez/Shutterstock.com

Courtesy of James David Adams, University of Southern California

Medical marijuana is legal in 33 states as of November 2018. Yet the federal government still insists marijuana has no legal u...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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